【Gold Price Trend】 Gold prices decline for the second consecutive day, affected by rising oil prices and bleak interest rate cut prospects

Gold prices decline for the second consecutive day, weighed down by rising oil prices due to Middle East conflict and bleak interest rate hike prospects. The latest gold price is $5,139.1, down 0.7%, while silver drops 0.9% to $84.9.

Although U.S. core inflation data was moderate before the Middle East conflict erupted, concerns about future inflation have reduced the likelihood of the Federal Reserve cutting interest rates. The dollar index rose by 0.3% at one point. According to interest rate futures, the market currently expects only one rate cut in the second half of this year.

▲ 【Gold Price Trend】 Gold declines for the second day, affected by rising oil prices and bleak rate cut outlook

Vantage Markets analyst Hebe Chen said that the decline in gold prices is “more of a pause than a surrender,” noting that the price pressure and the strengthening dollar have temporarily set aside the Fed’s recent easing policies. In a market where only one safe-haven asset can be favored at a time, the dollar is temporarily taking market share from gold.

The Israel-Hamas conflict has entered its 13th day, continuing to disrupt oil production and refining in the Middle East. Fears of prolonged conflict have overshadowed the largest emergency reserve releases in history, causing oil prices to continue rising.

Gold is a liquidity source investors use to support other parts of their portfolios when needed. Since the outbreak of the war, holdings of gold in exchange-traded funds (ETFs) have decreased.

Since the war began on February 28, the upward momentum of gold prices has stalled. Hebe Chen stated, “Safe-haven trading has not ended; it is just taking a breather.”

Finance Hot Talk

Is the safe-haven role of gold failing? Are fears of rate hikes triggered by the conflict?